Investor loans

Qualify on what the property earns, not what your tax return shows.

A DSCR loan is an investment property loan underwritten mainly on the rent the property produces. For self-employed investors and anyone scaling a portfolio, it removes the part of the process that usually causes the trouble: proving personal income.

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DSCR = Monthly rental income ÷ Monthly PITIA

PITIA is principal, interest, taxes, insurance and any HOA dues — the full cost of carrying the property, not just the mortgage payment.

At 1.0 the rent exactly covers the payment. Above it, the property earns more than it costs, and the bigger the cushion the better most lenders price it. Many programs look for 1.0 to 1.25; some accept less with a larger down payment, stronger credit or more reserves.

Worked example

Expected monthly rent: $3,000
Monthly PITIA: $2,600
DSCR ($3,000 ÷ $2,600): 1.15

Where it tends to work

You are self-employed, or your tax return understates what you actually earn
You are buying your second rental, or your fifteenth, and want a repeatable path
You want to buy or refinance in an LLC or other entity
The property brings in enough rent to carry its own payment
You are comfortable with a larger down payment and a rate that may run above conventional

It is not the right tool for a home you will live in. DSCR loans are for business-purpose investment property only.

The detail

Open what you need.

Program snapshotTypical ranges to plan around

Loan purpose	Purchase, rate-and-term refinance, cash-out refinance
Property types	Single family, 2 to 4 units, condos, townhomes; some programs allow short-term rentals
Minimum DSCR	Often 1.0 to 1.25; some programs go lower with compensating factors
Maximum loan-to-value	Commonly 75 to 80% on purchases, depending on credit and DSCR
Credit score	Usually a 620 to 700 minimum, with better pricing at higher scores
Reserves	Often several months of PITIA left over after closing
Loan terms	Fixed and adjustable options; interest-only on some programs
Prepayment penalty	Common on many programs; terms vary
Vesting	Individual or entity, such as an LLC

Guidelines vary by lender and change often. Daily confirms current numbers against your specific deal before you rely on any of them.

What to have readyNine documents, and why each one matters

Government photo ID
Verifies identity
Entity documents, if applicable
Articles, operating agreement and EIN letter for the LLC
Purchase contract, on purchases
Terms of the sale
Current mortgage statement, on refinances
Payoff amount and loan details
Lease agreements or rent schedule
Supports the rental income used in the DSCR
Bank statements
Show funds for down payment, closing costs and reserves
Homeowners insurance quote or policy
Confirms the insurance cost and coverage
Property tax and HOA information
Completes the PITIA calculation
Schedule of real estate owned
Lists the other properties you hold

Size up a propertyRun any deal through these eleven lines

Property address
Purchase price or current value
Down payment or equity
Loan amount
Expected monthly rent (A)
Monthly principal and interest
Monthly property taxes
Monthly insurance
Monthly HOA dues
Total monthly PITIA (B)
DSCR = A ÷ B

Rough estimates are fine to start. The last line is the number a lender will focus on.

How the process worksFive steps, start to keys

01Pre-qualifyWe talk through your goals, the property, your credit and your funds, then lay out the options worth considering.
02ApplyA short application, plus the documents from the checklist above.
03UnderwriteThe lender reviews the file, orders the property valuation and rent analysis, and may come back with a few questions.
04ApproveFinal approval lands, along with the conditions to close.
05Close and fundYou sign, funds are disbursed, and the property is yours or the refinance is complete.

The honest trade-offsWhat you gain, and what it costs

What you gain

Qualifies on the property's cash flow rather than your personal income
Far lighter documentation — most programs ask for no tax returns, W-2s or employment verification
Can usually close in an LLC
Repeatable, which is what makes it work for scaling a portfolio

What it costs

Rates typically run higher than conventional
Larger down payment requirements
Prepayment penalties are common
Not available for primary residences

Common questionsSeven that come up most

Can I use a DSCR loan on a short-term rental like an Airbnb?: Many lenders allow it, using projected or historical short-term rental income. Guidelines vary more here than almost anywhere else in the program, so it is worth asking early.
What if my DSCR is below 1.0?: Some programs still work, with a larger down payment, a higher credit score or additional reserves doing the compensating.
Do I need to show tax returns or pay stubs?: Most DSCR programs do not ask for them. Daily confirms the requirements for the specific lender and program before you start collecting anything.
What if the property is vacant?: Many programs can use the market rent estimate from the appraisal for a vacant or newly purchased property.
Is a DSCR loan a business-purpose loan?: Yes. These loans are for investment property rather than owner-occupied homes, so some consumer mortgage protections that apply to a primary residence do not apply here.
Can I close in my LLC?: Often, yes. Entity requirements vary by lender — check with your attorney or tax professional about the right structure for you.
Can I cash out on a property I already own?: Many programs offer cash-out refinances, subject to loan-to-value limits, seasoning requirements and DSCR.

Free tools worth usingIndependent calculators and research

Rental Property Calculator
Estimate cash flow and returns before you make an offer
Market Finder
Compare markets on rents, prices and growth
Rent Estimator
Get a feel for the rent a property could command
Forums, blog and podcasts
Ask questions and learn from other investors

BiggerPockets is one of the largest real estate investing communities online. These are their tools, not ours, and there is no affiliation — they simply pair well with the numbers above.

Visit BiggerPockets→

Send the address, the down payment and the rent you expect.

That is enough for Daily to map out your options. If you want a second set of eyes on a property before you commit to anything, that is free and there is no obligation attached to it.

Start the conversation

Or call (949) 535-4379

For informational purposes only. This is not a commitment to lend or an offer of credit. Loan programs, rates, terms and eligibility vary by lender and borrower qualifications and are subject to change. Loans described here are for business-purpose investment properties only and are not available for a primary residence. Talk with your tax, legal and financial advisors before making investment decisions.